‘Low-Cost’ Economies Not So Cheap

I just found this interesting article this week, although it’s almost 6 months old. I found it on another bloggers web site, which just shows, I suppose, that I should browse the other blogs more.

The low-cost allure of emerging economies such China, India and eastern Europe for Western companies is overdone once the meager productivity of their workers is factored in, the Conference Board said Oct. 3. Bart van Ark, director of the Conference Board’s international economic research program, said the report was a ‘critical lesson’ to Western companies seeking to take advantage of lower costs in emerging economies.

Add to that the fact that certain materials, like spring steel and stainless steel, aren’t available in sufficient quantity and quality, and it’s unclear why people think offshoring is a good idea.